Exhibit (10) P.
September 30, 2005
Xxxxxxx Xxxxxx
(address intentionally omitted)
RE: Termination of Employment
Dear Xxxxxxx:
Once signed by both parties, this letter will constitute an
agreement between Xxxxxxx Kodak Company ("Kodak") and you.
Its purpose is to confirm the terms of your termination of
employment by Kodak. For purposes of this letter, the term
"Company" will collectively refer to Kodak and all its
affiliates and subsidiaries.
1. Last Day of Work
It is hereby agreed that your last day of employment by
Kodak will be on January 1, 2006 (the "Last Day of Work"),
unless you resign or are terminated at an earlier date under
the terms of this letter agreement.
2. Responsibilities
During the remainder of your employment by Kodak, you will
perform such duties and responsibilities as are identified
by or on behalf of Xxxxxxx Xxxxx, and be responsible for
performing those transition expectations identified by him
or his designees. It is expected that you will perform
these duties, responsibilities and expectations in a timely
and satisfactory manner, and your receipt of the benefits
described in this letter agreement is contingent on your
satisfaction of this condition.
3. Severance Benefits
As a result of your termination, Kodak will pay you, subject
to your satisfaction of the requirements of this letter
agreement, the severance benefits described in this Section
3. Given your ineligibility for any benefits under the
terms of Kodak's Termination Allowance Plan ("TAP"), these
benefits are not being provided to you under the terms of
such plan. The following severance benefits are being
provided to you as a special arrangement under the terms of
this letter agreement:
X. Xxxxxxxxx Allowance. You will receive a severance
allowance in an amount equal to $1,646,040.00. As
stated in the Agreement, the severance allowance
will be paid in equal consecutive monthly payments
over the 12-month period commencing on the six-
month anniversary of the date of your termination
of employment. Kodak will withhold from the
severance allowance all income, payroll and
employment taxes required by applicable law or
regulation to be withheld.
Xxxxxx X. Xxxxxx, Director Human Resources, Sr. Vice
President
XXXXXXX KODAK COMPANY 000 XXXXX XXXXXX XXXXXXXXX, XXX XXXX
00000-00000
TEL (000) 000-0000 FAX (000) 000-0000, E-Mail:
xxxxxx.xxxxxx@xxxxx.xxx
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B. Continuation of Existing Health, Dental and Basic
Life Insurance Coverages. Your existing elections
under the Kodak Medical Assistance Plan ("Kmed")
and the Kodak Dental Assistance Plan ("Kdent") and
for Basic Coverage under the Kodak Life Insurance
Plus Plan will be continued, and fully paid by
Kodak, until the last day of the fourth month
immediately following the month of your
termination from employment. Upon conclusion of
this four-month period, you will be able to
continue your health and dental coverages for a
limited period of time by electing COBRA
continuation coverage. For more details regarding
how to elect COBRA continuation coverage, please
see "You and Kodak."
C. Retraining Allowance. You will receive a
retraining allowance benefit of up to $5,000.
This benefit will be provided to you in the same
manner, and on the same terms and conditions, as
if you were a "Former Employee" eligible to
receive a retraining allowance pursuant to Article
7 of TAP, except your retraining allowance
benefits will be paid in a lump sum on the first
day of the fourth month after the second
anniversary of your Last Day of Work. All
retraining allowance benefits will be subject to
all income, payroll and employment tax
withholdings required by applicable law or
regulation to be withheld.
D. Enhanced Retirement Benefit. Pursuant to and in
accordance with the terms of the letter agreement
between you and Kodak dated April 29, 2005 (the
"Agreement"), you will receive the current balance
in your phantom cash balance account, equal to
$200,000, plus accrued interest as of the Last Day
of Work. As stated in the Agreement, this amount
will (i) be paid in a lump sum within two weeks
after the date that is six months after the Last
Day of Work; (ii) not be funded in any manner;
(iii) be included in your gross income as ordinary
income, subject to all income and payroll tax
withholding required to be made under all
applicable laws; and (iv) not be grossed up or be
given any other special tax treatment by Kodak.
E. Outplacement Services. Outplacement services will
be provided to you in the same manner, and on the
same terms and conditions, as if you were eligible
for "Outplacement Services" pursuant to Article 8
of TAP.
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F. Offsets. The severance benefits set forth in this
letter will be paid to you in lieu of any other
severance, termination, or separation pay or
benefit to which you may otherwise be entitled,
except any benefits payable to you under TAP. In
the unlikely event it is ever determined by the
plan's administrator or a court of competent
jurisdiction that you are entitled to benefits
under TAP, it is agreed: (1) the portion of the
severance allowance equal to the amount of your
TAP benefits will be treated as paid pursuant to
TAP, not under this letter agreement; and (2) the
severance allowances payable to you under this
letter agreement will be reduced by the amount of
your TAP benefits. The severance allowance will
also be reduced by the amount of any unemployment
insurance benefits you receive.
G. Death. In the event that you die prior to the
commencement of the severance benefits as provided
in this Section 3, the total unpaid balance will
be paid in a lump sum to the executor or
administrator of your estate or to a properly
qualified personal representative within 90 days
of Kodak's receipt of information reasonably
evidencing your death, as determined by Kodak in
its sole discretion. In the event that you die
after the severance benefits provided in this
Section 3 have commenced, but before the receipt
of all severance benefits payable hereunder, any
unpaid balance will be paid in a lump sum to the
executor or administrator of your estate or to a
properly qualified personal representative, within
90 days of Kodak's receipt of information
reasonably evidencing your death, as determined by
Kodak in its sole discretion.
4. Benefits Not Benefits Bearing
The benefits under this letter agreement are not "benefits
bearing." In other words, the amount of these benefits will
not be taken into account, nor considered for any reason,
for purposes of determining any Company provided benefits or
compensation to which you are or may become eligible.
5. Release
In partial consideration for the severance benefits provided
to you under this letter agreement, you hereby agree to
execute immediately prior to your termination of employment
the Agreement and Release annexed hereto as Addendum A. In
the event you either fail to sign or, once signed, make an
effective revocation of Addendum A, you will not be entitled
to any of the severance benefits under this letter
agreement.
6. Executive Compensation for Excellence and Leadership
You will be eligible for an award under the Executive
Compensation for Excellence and Leadership ("EXCEL") plan
for the 2005 performance period in accordance with the terms
of EXCEL. Any award made to you will be paid at the normal
time of payout. You will not be eligible for an EXCEL award
for the 2006 performance period and you hereby forfeit any
and all rights to receive an award therefor.
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You hereby acknowledge and agree that individual performance
is but one factor that is taken into account in determining
awards under EXCEL. Other factors that are taken into
account include company performance, unit performance, and
discretion by the Executive Compensation and Development
Committee of the Board of Directors (the "Compensation
Committee"), Kodak's CEO and the participant's supervisor.
Given this, you further acknowledge and agree that the
Compensation Committee's determination with regard to the
amount and payment of any EXCEL award paid to you for 2005
will be final and binding upon you, and any other person
having or claiming to have any right or interest on your
behalf in or under the plan.
7. Stock Options
Subject to your satisfaction of the terms of this letter
agreement, your termination of employment will, for purposes
of any stock options held by you upon your termination, be
treated as an "Approved Reason." Thus, you will not forfeit
any stock options you hold on the Last Day of Work as a
result of your termination of employment under this letter
agreement.
8. Leadership Stock Program
Subject to your satisfaction of the terms of this letter
agreement, Kodak management will recommend to the
Compensation Committee that your termination of employment
be treated as for an "Approved Reason" pursuant to the terms
of Kodak's Leadership Stock Program. Should the
Compensation Committee agree with management's
recommendation, you will be eligible for a full award for
the program's 2004-2005 performance cycle, and a prorated
award for the program's 2005-2006 performance cycle,
calculated by applying 50% to the amount of the award
certified by the Compensation Committee. Any award made to
you with respect to either of these cycles will be paid
following certification by the Compensation Committee of the
Company's performance for the entire performance cycle,
pursuant to the terms of the Leadership Stock Program. With
respect to the 2006-2007 performance cycle, since you will
be terminating your employment during the first year of this
two-year performance cycle, you will not be eligible for any
award under the Leadership Stock Program for such cycle, and
hereby forfeit any and all rights to receive an award
therefor.
9. Restricted Stock/Restricted Stock Units
As a result of your termination of employment under this
letter agreement, effective the Last Day of Work, you will
forfeit any restricted stock or restricted stock units you
hold for which the restrictions have not lapsed as of the
Last Day of Work. You will not, however, forfeit any
restricted stock or restricted stock units you hold for
which the restrictions have lapsed as of the Last Day of
Work.
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10. Employee's Agreement
During your employment by Kodak, you signed an "Xxxxxxx
Kodak Company Executive Employee's Agreement (the
"Employee's Agreement")" in which you affirmed your
obligation not to disclose Company trade secrets or
confidential or proprietary information. Further, you
agreed not to engage in work or activities on behalf of a
competitor of the Company in the field in which you were
employed by Kodak for a period following termination of your
employment by Kodak equal to the total number of months you
were employed by Kodak, but in no event less than six (6)
months or more than eighteen (18) months. By signing this
letter agreement, you reaffirm your Employee's Agreement and
agree that it is in full force and effect, without amendment
or modification.
11. Cooperation
You agree to cooperate fully with Kodak from now to the date
of your termination of employment and thereafter during the
two (2) year period following your termination, taking into
account the demands of any subsequent employment by you with
a third party after the Last Day of Work, on all matters
relating to your employment and termination of employment,
the transition of your duties and responsibilities to your
successor(s), and the conduct of Kodak's business. You
further agree during such periods to cooperate fully with
Kodak regarding, and conduct all of your actions, statements
and communications in a manner consistent with, the
announcement by Kodak of your termination of employment.
In partial consideration for the severance benefits, you
also agree that during the period commencing on the date of
this letter and ending on the second anniversary of the Last
Day of Work, you will not in any way disparage, make any
statement, or take any action which is adverse, inimical or
otherwise detrimental to the interests of the Company or any
of its current or former officers, directors, and employees
or cause any of such persons embarrassment or humiliation or
otherwise cause or contribute to such persons being held in
disrepute by the public or the Company's shareholders,
clients, customers, employees or competitors. Kodak also
agrees that during such period of time, its officers and
directors will not in any way disparage, make any statement,
or take any action which is adverse, inimical or otherwise
detrimental to you or cause you embarrassment or humiliation
or otherwise cause or contribute to your being held in
disrepute by the public or the Company's shareholders,
clients, customers, employees or competitors.
Further, as set forth in your offer letter with the Company
dated November 7, 2002 (the "Offer Letter"), and in partial
consideration for the severance benefits, you hereby agree
that for the two-year period following your termination of
employment, you will not (i) directly or indirectly recruit,
solicit or otherwise induce or attempt to induce any of
Kodak's employees or independent contractors to terminate
their employment or contractual relationship with Kodak or
work for you or any other entity in any capacity, or (ii)
solicit or attempt to solicit the business or patronage of
any of Kodak's actual or prospective clients, customers or
accounts with respect to any technologies, services,
products, trade secrets or other matters in which Kodak is
active.
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12. Injunctive Relief
You acknowledge by accepting the benefits under this letter
agreement that any breach or threatened breach by you of any
term of Sections 10 or 11 hereof cannot be remedied solely
by the recovery of damages or the withholding of benefits
and the Company will therefore be entitled to an injunction
against such breach or threatened breach without posting any
bond or other security. Nothing herein, however, will
prohibit the Company from pursuing, in connection with an
injunction or otherwise, any other remedies available at law
or in equity for such breach or threatened breach, including
the recovery of damages.
13. Vacation
Upon your termination of employment, you will receive
payment in lieu of all your earned and unused carried-over
and current vacation as of the Last Day of Work.
14. Miscellaneous
A. Confidentiality. You agree to keep the content
and existence of this letter agreement
confidential except that you may review it with
your supervisor, attorney, financial advisor,
and/or with me or my designee. Prior to any such
disclosure, you agree to advise these individuals
of the confidential nature of this letter
agreement and the facts giving rise to it as well
as their obligations to maintain the
confidentiality of this letter agreement and the
facts giving rise to it.
B. Tax Liability. By signing this letter agreement
you agree that the Company has not provided you
with advice regarding the tax treatment of any of
the benefits or payments provided hereunder,
including without limitation those benefits set
forth in Section 3. You hereby acknowledge that
Kodak will not report any such amounts as taxable
(or make any related withholding of tax) under
Section 409A of the Internal Revenue Code of 1986,
as amended, or administrative guidance thereunder,
and you agree to indemnify and hold the Company
harmless for any liability associated with such
reporting and withholding treatment.
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C. Section 409A of the Internal Revenue Code. The
arrangements described in this letter agreement
are intended to comply with Section 409A of the
Internal Revenue Code to the extent such
arrangements are subject to that law. The parties
agree that they will negotiate in good faith
regarding amendments necessary to bring the
arrangements into compliance with the terms of
that Section or an exemption therefrom as
interpreted by guidance issued by the Internal
Revenue Service. The parties further agree that
to the extent an arrangement described in this
letter fails to qualify for exemption from or
satisfy the requirements of Section 409A, the
affected arrangement may be operated in compliance
with Section 409A pending amendment to the extent
authorized by the Internal Revenue Service. In
such circumstances Kodak will administer the
letter in a manner which adheres as closely as
possible to the existing terms and intent of the
letter while complying with Section 409A. This
paragraph does not restrict Kodak's rights
(including, without limitation, the right to amend
or terminate) with respect to arrangements
described in this letter to the extent such rights
are reserved under the terms of such arrangements.
D. Unenforceability. If any portion of this letter
agreement is deemed to be void or unenforceable by
a court of competent jurisdiction, the remaining
portions will remain in full force and effect to
the maximum extent allowed by law. The parties
intend and desire that each portion of this letter
agreement be given the maximum possible effect
allowed by law.
E. Headings. The heading of the several sections of
this letter agreement have been prepared for
convenience and reference only and shall not
control, affect the meaning, or be taken as the
interpretation of any provision of this letter
agreement.
F. Applicable Law. This letter agreement, and its
interpretation and application, will be governed
and controlled by the laws of the State of New
York, applicable as though to a contract made in
New York by residents of New York and wholly to be
performed in New York without giving effect to
principles of conflicts of law. Disputes arising
under this letter agreement shall be adjudicated
within the exclusive jurisdiction of a state or
federal court located in Monroe County, New York.
Neither party waives any right it may have to
remove such an action to the United States Federal
District Court located in Monroe County, New York.
G. Amendment. This letter agreement may not be
changed, modified, or amended, except in a writing
signed by both you and Kodak which expressly
acknowledges that it is changing, modifying or
amending this letter agreement.
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H. Forfeiture. In the event that you violate any
provision of this letter agreement, including
Addendum "A", or your Employee's Agreement, in
addition to, and not in lieu of, any other
remedies that Kodak may pursue against you, no
further severance benefits will be made to you
hereunder and you agree to immediately repay all
severance benefits previously paid to you pursuant
to this letter agreement. In such event all other
provisions of this letter agreement will remain in
full force and effect as though the breach had not
occurred.
Your signature below means that:
1. You have had ample opportunity to discuss the
terms and conditions of this letter agreement with
an attorney and/or financial advisor of your
choice and as a result fully understand its terms
and conditions; and
2. You accept the terms and conditions set forth in
this letter agreement; and
3. This letter agreement, including in particular its
reference regarding the continuing effectiveness
of your Employee's Agreement, supersedes and
replaces any and all agreements or understandings,
whether written or oral, that you may have with
the Company concerning your termination of
employment and any special or other separation,
termination, retirement or compensation
arrangement, except for your Employee's Agreement,
which shall continue in full force and effect, and
the Agreement, the terms of which are hereby
incorporated herein and made a part hereof. To
the extent of any conflict between the terms of
this letter agreement and the terms of your
Employee's Agreement or the Agreement, the terms
of this letter agreement shall control.
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If you find the foregoing acceptable, please sign your name
on the signature line provided below. Once the letter
agreement is executed, please return it directly to my
attention.
Very truly yours,
/s/ Xxxxxx X. Xxxxxx
Xxxxxx X. Xxxxxx
RLB:seu
Enclosure
I accept the terms and conditions of this letter agreement.
Signed: /s/ Xxxxxxx Xxxxxx
-----------------------
Xxxxxxx Xxxxxx
Dated: October 5, 2005
